Instructions Kimbrell Inc. manufactures three sizes of utility tables-small (S), medium (M), and large (L). The income statement has consistently indicated a net loss for the M size, and management is considering three proposals: (1) continue Size M, (2) discontinue Size M and reduce total output accordingly, or (3) discontinue Size M and conduct an advertising campaign to expand the sales of Size S so that the entire plant capacity can continue to be used. If Proposal 2 is selected and Size M is discontinued and production curtailed, the annual fixed production costs and fixed operating expenses could be reduced by $142,500 and $28,350, respectively. If Proposal 3 is selected, it is anticipated that an additional annual expenditure of$85,050 for the salary of an assistant brand manager (classified as a fixed operatin would yield an additional 30% in Size sales volume. It also assumed that the g expense increased production of Size S would utilize the plant facilities released by the discontinuance of Size M The sales and costs have been relatively stable over the past few years, and they are expected to remain so for the foreseeable future. The income statement for the past year ended December 31, 2016, is as follows: Site Size L Total $990,000.00 $1,087.500.00 $945,000.00 $3.022.500.00 $538.500.00 $718.500.00 $567.000.00 $1.824.000.00 AH Total cost of goods sold 51.006 50000 S817,000.00 $2.603.000,00 $210,500.00 $128,000.00 $419.500.00 7 Gross profit Less operating expenses: SE5.050 00 S118,100.00 5108.75000 S311,900.00 9 Variable expenses 88.900.00 $150,225.00 11 Total operating expenses $60,275.00 $(0.275.00) 12 Income from operations Required